The EUR/USD pair fell slightly during the course of the session on Thursday, as the Americans would’ve been away from the markets as the Thanksgiving holiday took focus. Ultimately though, this is a market that continues to break down and with that being the case, I believe that we are trying to reach towards the next large, round, psychologically significant level, the 1.05 level.

Rallies at this point in time should be selling opportunities, and that’s exactly how I am trading this market. Looking at this chart, I think that the previous uptrend line from the ascending triangle should be the ultimate “ceiling” in this market, and every time we rally and show signs of exhaustion, it should be a nice short-term selling opportunity. The Euro continues to be one of the softest currencies that I follow at the moment, and of course the US dollar is without a doubt the strongest currency in the world right now.

A Lot of Uncertainty Out There

As long as there is a lot of uncertainty out there, I feel that this pair will continue to grind lower. I don’t think that it’s going to fall apart, just that there will be a bit of a sustained downward pressure. I believe that it’s only matter of time before rallies sell off, but I do not look for massive moves. I think that short-term selling again and again will be the way going forward, and as a result that’s exactly how I’m going to trade going forward, at least until the end of the year. Once the year is done and the holidays are in the rearview mirror, we could have a bit more momentum, and at that point in time we could very well break down below the 1.05 level and reach towards the parity level, an area that would’ve been unthinkable just 6 months ago. On entering, if we break above the top of the ascending trend line, I would be a buyer and perhaps see the market reach towards the 1.15 handle.